Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest? TABLE 3 Project A Project B Time 0. -11,000. -10,000 Time 1. 3,000. 4,000 Time 2. 8,000. 3,000 Time 3. 3,000. 10,000 A) Project A B) Project B C) Project A and Project B have the same ranking. D) It cannot calculate a payback period without a discount rate.
Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses payback period rule to choose projects, which of the projects (Project A or Project B) will rank highest?
TABLE 3
Project A Project B
Time 0. -11,000. -10,000
Time 1. 3,000. 4,000
Time 2. 8,000. 3,000
Time 3. 3,000. 10,000
A) Project A
B) Project B
C) Project A and Project B have the same ranking.
D) It cannot calculate a payback period without a discount rate.
7 Consider the cash flow of the two projects depicted in Table 3. If WiseGuy Inc. uses
A) Project A
B) Project B
C) Project A and Project B have the same ranking.
D) It cannot calculate a payback period without a discount rate.
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